Am Legally liable for lien on motorcycle?

You are not liable for the underlying debt, but the bike is still subject to the lien and the lien holder could take possession if it could do so without causing a breach of peace. You don't owe them any money, so they should not be able to legally do anything to affect your credit rating. You do need to get the lienholder's release in order to title or register the bike. What's the bike worth? A lawyer could probably straighten it all out for you, but the lien holder may be willing to release the title to you for less than the lawyer would charge you. It can't hurt you to contact them and see what they would want from you in order to release the lien.